Key Highlights
- TV & Audio: AppleTV+ is hemorrhaging money, which could make it an acquisition target if Apple feels excessive tariff pressure this year.
- Paid Social: The extension for TikTok to divest or risk being banned is set to expire this Saturday, April 5th. The U.S. Government suggests that a sale is imminent and will be announced before Saturday.
- Display & Programmatic: YouTube surpasses Disney in viewership to become the largest media company
- Search: Google continues fighting legal battles, most recently a $100m settlement over former advertising billing practices.
- Ad Economy: From AppLovin’ to AppLyin’: Allegations put company’s integrity in the spotlight.
- Consumer Economy: The Trump Administration has announced punishing new tariffs on all imports, in what amounts to the largest U.S. tax increase in over half a century.
TV & Audio
The early rounds of March Madness posted strong viewing figures (see below), but weaker viewing numbers for the later rounds of both the men’s and women’s tournaments led to YoY declines in sports viewership. The lack of Caitlin Clark on the women’s side, and of any Cinderella teams on either side, seems to have dampened interest somewhat. News viewing is up slightly, with trade politics (gulp) driving the cable news cycle.
1. We haven’t often discussed AppleTV+ in this space, as it is one of the few remaining streaming services without an ad-supported tier. One might think the service would be exceedingly popular, with shows like Severance, Shrinking, and Ted Lasso helping the platform secure 72 Emmy nominations last year and a heavy majority of streaming viewers desiring an ad-free experience when they pay for a subscription. And yet, the streamer does not even appear on Nielsen’s Gauge, accounting for just ~0.3% of total audience time. This puts AppleTV+ far behind even small platforms such as Paramount+ or Pluto.
The failure to capture persistent audience attention, coupled with the lack of ad revenue, has put the platform in a poor financial position. AppleTV+ is reportedly losing over $1 billion per year, and its subscriber count lags substantially behind its competitor set. Apple has clearly tried to boost the platform, spending over $5B annually on content and allowing Comcast to include the service as part of a bundle with Peacock and Netflix. Yet, regardless of the moves they’ve made in Cupertino, the platform has simply failed to find traction despite five years of trying.
Apple faces a conundrum. It has already started to reduce content investment amid these financial shortfalls, but with a market cap of over $3 trillion, Apple may feel it can withstand losses of this size, especially if it gives a marginal improvement to its hardware sales. At the same time, tariff pressures may force Apple to focus more on profitability, which could make AppleTV+ an interesting asset for M&A. We’ve mentioned many times in this space that we expect consolidation to be the story of the streaming space in the coming years; look for AppleTV+ to potentially be a key prize that a larger entity such as Netflix, Prime, or Disney, could come after. | Nielsen, Reuters
2. The men’s and women’s NCAA basketball tournaments have drawn high viewership this year. Through the first two rounds, the men’s tournament’s audience was up 4% year-over-year, giving the tournament its strongest start since 1993. Meanwhile, the women’s tournament is on track for its best audience since 2009, with the exception of last year’s tournament which benefitted from the “Caitlin Clark effect.” With an all-top-seed Final Four on the men’s side and a top-heavy draw on the women’s side, expect ratings this coming weekend to be strong for both tournaments.
The growth of the women’s sports audience over the last year has been something to behold. Caitlin Clark famously drew enormous viewership during her NCAA career which has translated to the WNBA, while women’s sports at the 2024 Olympics and the National Women’s Soccer League have both set impressive audience marks. Interestingly, a recent poll shows that men were actually more likely to watch women’s sports than women are, showing the broad appeal of these live events. Advertisers should take note – women’s sports should not be thought of as a “niche” investment to a particular demographic. Instead, they should be considered as an expansion of the major tentpole opportunities that have the potential to draw huge, diverse audiences across the US. | March Madness on X
Paid Social
The big news in the Social space this week is the impending ban deadline, currently slated for Saturday April 5th. As you may recall, last spring, President Biden signed a Foreign Adversary Act mandating that communication channels cannot be a majority owned by a foreign adversary, in this case China. The bill contained language that ByteDance, TikTok’s parent company, would need to divest a majority stake in TikTok, or it would get banned in the U.S. on January 19th, 2025. When President Trump took office in January, he signed an executive order extending the ban deadline by 75 days, to April 5th. Starting off the week, President Trump stated that TikTok will be sold to a U.S. owner ahead of the April 5th enforcement deadline—a move intended to avoid another shutdown of the app. On Wednesday, Amazon and Applovin’ announced that they were making a bid to buy TikTok as well. While this may sound like clarity, we’re still in the dark on key details: Who decides who it is sold to? Has ByteDance or the Chinese government agreed to terms? And critically, what will this mean for advertisers? So far, no formal communication has been shared with advertisers, data partners, or users. What we do know is that TikTok will continue operating in its current form up to (and potentially beyond) April 5th, and for now, it’s business as usual on-platformâ.
For advertisers, the best move right now is to stay nimble and prepared. Performance on TikTok remains strong, so there’s no need to pull back spend prematurely—but contingency planning should absolutely be happening behind the scenes. The most likely outcomes are either a deadline extension, a last-minute sale, or another stall in enforcement, all of which would allow TikTok to remain live in the U.S. in the short term. That said, the least likely—but still possible—scenario is that enforcement does happen, which would result in TikTok being removed from U.S. app stores and potentially shut down altogether for U.S. users. Bottom line: keep buying while performance is there, but have backup channels and creatives ready to pivot if needed. More to come as we near the deadline over the next 24 hours and beyond. | NPR, USA Today, BBC, NY Times
Display & Programmatic
YouTube has become the largest media company, surpassing Disney in total TV viewing by capturing 11.6% of the market in February. This is only the second time YouTube has claimed the top spot since Nielsen began tracking in late 2023, but with the platform’s steady growth, we expect it won’t be the last.
And YouTube’s rise isn’t just about viewership. Last year, YouTube brought in $54.2 billion—just $5.5 billion shy of Disney. Given the consistent growth, analysts at MoffettNathanson predict that YouTube will surpass Disney this year to become the world’s largest media company based on revenue.
While YouTube has long been seen as a platform for younger audiences, viewership among adults 65+ has nearly doubled (+96%) in the past two years, playing a key role in the platform’s growth. This shift underscores the fact that YouTube’s appeal now extends across all generations.
A key driver of YouTube’s appeal is the vast and diverse content library. The platform allows viewers to easily switch between podcasts, tech reviews, news, sports, and long-form, creator-driven shows. What is often overlooked, however, is the quality of the creator-driven content. Many YouTubers are producing engaging, high-quality videos that run 60 to 90 minutes or longer. The videos aren’t just capturing viewers’ attention—they pull them into deep binge-watching sessions, where they consume multiple videos from the same creator and return week after week for more.
These trends are too big for advertisers to ignore. Their audience is already on YouTube and highly engaged, making now the ideal time for brands to invest in a comprehensive YouTube strategy. This includes partnering with creators to build stronger connections and reach their target audience. And, by leveraging measurement tools such as brand lift, search lift, and incrementality testing, brands can track YouTube’s impact and refine their approach to drive real business growth. | Nielsen, Business Insider
Search
After a 14-year legal saga, Google has agreed to a $100 million cash settlement over advertising billing practices, but has stopped short of admitting any fault. While the proposed settlement still requires approval by a judge, the outcome of this case could potentially lead to tighter regulations and greater oversight of ad platforms in general.
This particular class action lawsuit accused Google of misleading advertisers by manipulating its Smart Pricing formula to artificially reduce discounts and by billing for ads outside the advertisers’ targeted geographic location between 2004 and 2012. The specific advertising-related practices that were in question here are now obsolete; said Google spokesperson José Castañeda, “This case was about ad product features we changed over a decade ago and we’re pleased it’s resolved.”
In other legal news, Google remains under the microscope in the larger monopoly case. In early March, the US Justice Department released another filing reiterating its demand that a court should break up the online search company. The judge for that case is scheduled to hear arguments on proposed solutions from both Google (which intends to appeal) and the US government in April.
Despite Google’s legal challenges, Emarketer is projecting that Google’s parent company, Alphabet, will drive the most total digital ad revenue worldwide in 2025, ahead of other major players including Meta and Amazon.
As mentioned in our last media update, recent studies found that Google Search grew by over 20% in 2024. In other words, Google’s dominance in the search landscape likely isn’t going anywhere anytime soon. While diversification of media investments is still important, brands and advertisers will need to continue nailing the foundations of both organic and paid search efforts on Google in order to drive business outcomes. | Reuters, The New York Times, Emarketer, SparkToro
Ad Economy
AppLovin’s pivot to ad tech has driven explosive growth—but performance marketers should retain some skepticism as new research from short sellers is casting serious doubt on whether the platform can back up its claims.
Muddy Waters Research estimates over half of AppLovin’s e-commerce sales come from retargeting, with true incrementality in the 25–35% range. That’s a troubling stat for any platform claiming to drive net-new growth. Churn in Q1 2025 is pegged at 23%, suggesting retention may be just as shaky as performance.
This echoes earlier critiques from Culper and Fuzzy Panda, which framed AppLovin as a well-marketed black box with questionable fundamentals. In response, CEO Adam Foroughi defended the company’s data practices and stated that AppLovin’s standards are no different than Google or Meta, highlighting its AI-driven targeting of interstitial gaming ads, a niche format where it claims unmatched yield.
Analysts at Citi have dismissed the short reports, but notably offered no real rebuttal of the incrementality claims. That leaves marketers in an awkward spot: AppLovin looks increasingly like a high-ROAS, low-lift platform.
For now, we recommend advertisers approach AppLovin’s performance claims with healthy skepticism. If retargeting is doing the heavy lifting (which the results of the incrementality studies released by Haus would also align with), it’s vital to measure incrementality rigorously. For now, get comfortable as it’s unlikely this story will be going away any time soon. | Muddy Waters Research, AppLovin, IBD, Haus
Consumer Economy
1. We’ll once again try to start with some positive news – the Labor Department released fresh data in mid-March showing a steady, low level of jobless claims, underscoring the continuing resilience of the US labor market. Initial claims, coming from those recently separated from a job, rose slightly to 223k; continuing claims, coming from those already on unemployment benefits, rose slightly to 1.89m.
This basic picture is consistent with the unemployment data, which show the unemployment rate holding steady at a very low 4.1%:
Fed Chair Powell described the fresh data as “a low firing and low hiring situation,” which reflects a labor market in relative balance; however analysts are watching for any uptick in job separations as it has recently been taking longer for unemployed to find new employment. | Bloomberg
2. OK, back to our regularly scheduled programming. The White House has officially announced the details of new, comprehensive import tariffs:
- A new 10% baseline tariff on all imports, effective April 5th (that’s three days for businesses and consumers to make adjustments)
- 25% tariffs on all imported automotive vehicles, effective midnight Thursday
- Designated foreign nations will have “discounted reciprocal tariffs” applied to their exports to the US, these higher rates being for nations the White House considers bad actors on trade; notable duties will be 34% on Chinese goods, 24% on Japanese goods, and 20% on E.U. goods, effective April 9th
The market reaction was quite negative – given that everyone knew these tariffs were coming, a reasonable inference is that the announced plans are “worse” than market participants had expected. S&P futures fell by almost 3% immediately following the formal announcement:
It is difficult to overstate what a break this represents from ~80 years of US trade, economic, and foreign policy. Doug Irwin, the dean of American trade economists, said in advance of the announcement, “This is going to be much bigger than Smoot-Hawley,” referring to the infamous US tariffs imposed in the early 1930s that ignited a global trade war and deepened the Great Depression. Those tariffs began to be peeled back in the 1940s, ushering in eight decades of consistently low taxes on foreign trade:
Following Wednesday’s White House announcement, Irwin confirmed his own fears:
Numerous market indicators are all pointing in negative directions. Consumer confidence has fallen once again, reaching its lowest level since early 2021, including a huge spike in inflation expectations:
The Atlanta Fed’s GDPNow tracker is now at -3.7% for Q1; eight weeks ago it was +3.9%.
Echoing the Atlanta Fed, traders on Polymarket are now pricing in even odds of a recession in 2025, with the likelihood spiking by seven percentage points on April 2nd, the day of the formal announcement:
Even the manufacturing sector, ostensibly the main beneficiary of the tariffs via hoped-for reshoring of manufacturing activity, is feeling glum – US factory activity contracted in March for the first time this year and prices accelerated sharply for a second month as tariff uncertainty built up.
Ultimately, what impact is this going to have on consumers’ bottom lines? The Yale Budget Lab has crunched the numbers, key findings are:
- Incorporating all new 2025 tariffs, the average effective US tariff rate is now 22 ½%, the highest since 1909
- The price level rises by 2.3%, the equivalent of an average per household consumer loss of $3,800 in 2024 dollars
- Real GDP growth is 0.9% lower in 2025; in the long run, the US economy is persistently 0.4% – 0.6% smaller, the equivalent of $100b – $180b annually in 2024 dollars
- Tax revenue increases by $3.1t over 2026 – 2035; that works out to about $300b per year, which would be the largest tax increase since at least 1968
- Tariffs are regressive taxes (meaning they are proportionately larger for the poor than for the wealthy); losses for households at the bottom of the income distribution are about $1,700
- New 2025 tariffs disproportionately affect clothing and textiles, with apparel prices rising 17%
For additional background on how we got here, refer back to our tariff coverage from February and March of this year. | WSJ, Bloomberg, Bloomberg, Bloomberg, Yale Budget Lab